A new treatment for hepatitis C is considered a breakthrough for people with the liver disease. But the high cost of the drug — about $1,000 a pill — has complicated efforts to get the medication to Texans who receive government-subsidized health care.

The state’s prison system and the taxpayer-funded Medicaid program, which covers poor children and people with disabilities, are trying to determine who qualifies for the drug, which is 80 to 90 percent effective but can cost $84,000 for a 12-week regimen.

In Texas, where roughly 300,000 people have chronic hepatitis C and many more may ...

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How else do you think the researchers and doctors who worked to identify and develop the drug should be paid for their efforts? It surely took millions of dollars of labor and other resources to come up with it. If the end product can't be priced to pay for the R&D, nobody will invest in making the drug in the first place.

Medicare, Medicaid, and most likely the state prison system are by law forbidden to purchase the same drug (usually drastically cheaper) being sold in another country. Guess who helped draft that law. Guess which majority party passed that law. Regardless of the dark matter of R&D costs, we are in effect, subsidizing the rest of the world whose governments (unlike the U.S.) will not allow exorbitant charges for drugs. Wake up, sheep.

The concept of average versus marginal cost would seem to apply here. Yes, one pill probably only costs a dollar or two to produce, and in societies that can't afford to bear the full R&D costs (for both successful and failed drugs) it's common for pharmaceutical companies to heavily discount the drug even though they could theoretically "profiteer" by charging the average cost plus a profit margin. The problem is coming up with what you need to put in the pill in the first place. Which again costs millions, not only for the drugs that work but the drugs that don't too.

Even with Medicare Part D, assuming one of the companies might actually even include it in their formulary, the end cost to the user would be $470 per pill. A competitor or three is just around the corner. Most Hep C victims are stable, and they will wait.